ABSTRACT
The basic coverage provided by any class of liability insurance is in respect of negligence on the part of the insured. At common law, a director is under a duty to disclose to the shareholders in general meeting any interest they have in a contract to which the company is (or is to become a party). In practice, D&O policies commonly provide for an express exclusion from cover where the insured has, through their deliberate misconduct made a secret profit for which they have to account to the company. Regulation of the financial services market has been always concerned with protecting the investor, a social and economic and legal aim. D&O insurance bears the same characteristic. Plainly, negligence on the part of the directors in the exercise of their duties, and the consequent personal liability which will ensue, is the primary ground upon which a D&O policy may be called upon to provide an indemnity to the directors.
